SOME RELIEF FROM INCREASING OIL PRICES? 1

An article in the New York Times (14 June 2008) reported that Saudi Arabia, the world’s largest oil exporter and the US’ second largest source of crude, announced that it was increasing its production level by 500,000 barrels per day.
In a previous post, we dug up statistics from the Energy Information Administration which showed that, based on the respective shares of Refining, Distribution & Marketing, Taxes & Crude Oil in pump price, it is the crude oil which has caused most of the increase in price (from a 52% share in the retail price of gas in March 2007 to 70% in March 2008). The respective shares of the other sectors have actually gone down.

Does this announcement of Saudi Arabia appear to you to be a light at the end of the tunnel?

graphics by Ren Garcia